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Rehabbing deals with hard money real estate loans

Rehabbing Deals With Hard Money Real Estate Loans

Fore rehabbers it is crucial that they have access to hard money real estate loans or other forms of financing. Without funding, finding great houses to repair will be futile. That is why they go for those that are approved fast and are fit for their business plans. So why do to these investors go for hard money? Here are some reasons why.

This is fast financing. Rehabbing is simply selling a property fast after making repairs and improvements on it. If it stays too long on the market, it will depreciate. If rehabs are done fast, the competition in this business is faster. Investors in this niche are always racing against time and each other. But to beat competitors, they must have access to fast cash. This is what hard money financing allows them to do. These loans are process between one and two weeks. Banks and other conventional lenders need twice as much time just to process applications. Such time is just too long.

This is convenient financing. What is the usual scenario when you apply for bank loans? You will provide proofs of you current income. You will need to submit a lot of documents about your so-called creditworthiness. They will scrutinize your credit history. If you don’t have a job, you’re doomed. If you went through foreclosure before, you’re double-doomed. Securing hard money real estate loans, meanwhile, is more convenient. If you are unemployed, that’s fine. The important thing is that you have a good real estate deal in hand. If the lender thinks that the deal is profitable, he will finance it. This is how hard money financing works.

This is huge financing. Hard money real estate loans, unlike conventional loans, are computed based on the ARV, or after repair value of the property. It is literally the value of the property after it is rehabbed. If the ARV is high, you’ll get a big loan. And while you will only get up to around 70% of the ARV, the amount is usually enough to purchase a dilapidated house and make necessary repairs on it. Traditional loans, meanwhile, are based on the current value of the property. Therefore, if you want to rehab a dilapidated home, a traditional lender will give you enough money to purchase it. As for the repairs, you will have to find other sources of financing for those.

Rehabbing real estate deals is so much better with hard money. Go to RehabHardMoney.com and see how you can use this financing to your advantage.

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